Mortgage For Thai Wife Based On My Income?

[Pakeha]

Ok this has probably been asked before. If you hate people who don't know how to UTFSE I apologise.

My wife and I want to buy a house. We will pay a 20% deposit and want to get a mortgage for the rest of the property value. My wife is thai and the property will be in her name but she will not have an income to declare. I am a farang and I will have the income from full time, permanent employment within Thailand.

Three questions:

Will the bank give us a mortgage? If it makes any difference we own property outside of Thailand but would prefer to keep it entirely separate.

What's a good bank for our purposes?

Is it possible at all to get a mortgage in Thailand whilst we are resident and employed overseas?

[trogers]

Mortgage for a landed property based only on a farang's income will be a no-no in the eyes of the Land dept, even if the bank agrees.

Easier way is to mortgage your overseas property and use the money to pay for the Thai property.

[rgw]

Mortgage for a landed property based only on a farang's income will be a no-no in the eyes of the Land dept, even if the bank agrees.

Easier way is to mortgage your overseas property and use the money to pay for the Thai property.

we got a mortgage based on my thai salary (my wife has no salary), so i am the guarantor

land and house is on the wifes name offcourse, and i cannot claim anything on it.

Not the perfect solution for many people, but OK

need passport, WP, show that you pay local taxes, letter from your employer stating your salary, you'll (and your wife) be checked at the National Credit Bureau offcourse

We did it with UOB (end 2008), other banks didn't offer 95% for farang guarantors (usually only 50-70%)

this was offcourse before the slum in the market

Recently checked with UOB, and they still have similar possibilities, even on 2nd hand houses in good projects, which technically have appraised in value (??)

if you want our house, only 5.9M (we're leaving)

[dave111223]

Mortgage for a landed property based only on a farang's income will be a no-no in the eyes of the Land dept, even if the bank agrees.

Easier way is to mortgage your overseas property and use the money to pay for the Thai property.

I don't see how the Land Dept. comes into the equation if the bank agrees on the loan? When purchasing properly using a bank loan when you go to make the transfer at the land dept. some guy from the bank shows up with the check, and you do the deal...the land dept. does not look at or analyze the terms of the loan (or examine the criteria that the bank used in approving the loan)... In fact if i remember correctly the land department officer wasn't even present at the table when we actually handing over the check/cash to the seller.

[trogers]

Mortgage for a landed property based only on a farang's income will be a no-no in the eyes of the Land dept, even if the bank agrees.

Easier way is to mortgage your overseas property and use the money to pay for the Thai property.

I don't see how the Land Dept. comes into the equation if the bank agrees on the loan? When purchasing properly using a bank loan when you go to make the transfer at the land dept. some guy from the bank shows up with the check, and you do the deal...the land dept. does not look at or analyze the terms of the loan (or examine the criteria that the bank used in approving the loan)... In fact if i remember correctly the land department officer wasn't even present at the table when we actually handing over the check/cash to the seller.

Would not the bank's rights as mortgagor be processed and recorded into the title deed by the Land dept?

[dave111223]

Would not the bank's rights as mortgagor be processed and recorded into the title deed by the Land dept?

Yes, but that doesn't mean the land department would see the details of the of loan (such as rate, term, or criteria for approval, who's income was use in order to obtain the loan etc..)

[trogers]

Would not the bank's rights as mortgagor be processed and recorded into the title deed by the Land dept?

Yes, but that doesn't mean the land department would see the details of the of loan (such as rate, term, or criteria for approval, who's income was use in order to obtain the loan etc..)

They can ask for the details. Just like they now commonly ask some Thai sellers to show that the property was bought with their money when they suspect nominee issues.

[scorecard]

Mortgage for a landed property based only on a farang's income will be a no-no in the eyes of the Land dept, even if the bank agrees.

Easier way is to mortgage your overseas property and use the money to pay for the Thai property.

I don't see how the Land Dept. comes into the equation if the bank agrees on the loan? When purchasing properly using a bank loan when you go to make the transfer at the land dept. some guy from the bank shows up with the check, and you do the deal...the land dept. does not look at or analyze the terms of the loan (or examine the criteria that the bank used in approving the loan)... In fact if i remember correctly the land department officer wasn't even present at the table when we actually handing over the check/cash to the seller.

Agree with dave 111223, I've had similar experience, lands title staff asked no questions and were not present when the cheque and accompanying documents were transacted, there was of course the recording of the bank name on the chanut for the bank to gain a security for the loan.

Also agree with the previous post in regard to UOB bank. Our situation was a little different but ultimately the same points. The land and house was for my adult Thai son, married, one small child, son still at university. Mortgage (loan)was written in sons name (he has no income) with me as guarantor with a work permit. Luckily we know our local UOB manager very well long term, he suggested the whole approach, he pushed the application but ultimately it still had to be approved by UOB head office and it was.

Edited August 4, 2010 by scorecard

[Mercury]

The cases where I have heard similar to this being done have been with the foreigner working legitimately in Thailand and having a taxable proven income rather than a retirement income for example.

[thomo]

house is on the wifes name offcourse,

Why is the house in the wife's name, you can own and mortgage one yourself.

[CWMcMurray]

I have to agree with others... the land department does not care about the Bank's lending criteria... at least they didnt in our case.

My wife has her own store, and we submitted her info, but she did not make enough to qualify for the full loan amount on her own, so I co-signed... I work in Thailand: WP, pay taxes and all the rest ... we did not have a problem. Aproved for 90% through Siam City

[olsen]

house is on the wifes name offcourse,

Why is the house in the wife's name, you can own and mortgage one yourself.

Yes, OP can own the house in his own name, but not the land.

Mortgaging the house is difficult for foreigners in Thailand right now....but if you OP can prove his income and has a proper work permit and visa I cannot see the problems the bank should not accept!

[Pakeha]

Mortgage for a landed property based only on a farang's income will be a no-no in the eyes of the Land dept, even if the bank agrees.

Easier way is to mortgage your overseas property and use the money to pay for the Thai property.

This isn't attractive because Interest rates in NZ are 6% and rising. They are half this in Thailand.

[Pakeha]

Thanks all for your input.

I've looked at UOB website and it looks pretty straight forward provided I am accepted as guarantor. My wife will have a work history in NZ but not Thailand (for the past 6 years at least). Part of the "Applicant Qualification" is "At least 2 years of working experience (3 years if self-employed)". I take it this is meant to be in Thailand? This could be the catch? My thai income will be modest but hopefully sufficient to satisfy the bank. Does anyone have any idea what would be the minimum to satisfy the bank?

Someone asked why put the property only in my wife's name? Why not? I don't see us separating but if we did I'd want her to have that house. It'll just go to the kids eventually anyway.

Could a thai national get a mortgage in Thailand when they are living overseas and based on overseas income? I.e. could my wife get the mortgage now? Not that we probably would.

Cheers.

[gregb]

Mortgage for a landed property based only on a farang's income will be a no-no in the eyes of the Land dept, even if the bank agrees.

Easier way is to mortgage your overseas property and use the money to pay for the Thai property.

I don't see how the Land Dept. comes into the equation if the bank agrees on the loan?

At the risk of inciting yet another 50 page thread on the relative merits of this argument, I will summarize briefly. Before I do that, for the OP, every bank with the exception of Government Housing Bank has at one time or another allowed what you are asking. Their conditions and willingness to loan to wives using the farang's income changes with the phases of the moon. Best you flip a coin, throw some chicken bones, ask some posters on Thai Visa, and then ignore all of that and simply apply at several banks to see if any accept you. For the next several weeks your experiences may help someone else until the banks change their policies again.

Now, as for why the Land Department comes into this, it is because you are technically lying when you sign the paper at the land office that says the funds used to purchase the land came entirely from your wife (sin suan tua of the wife). A loan clearly requires paying back from marital assets (sin somros), not solely from the wife's assets. So, to the exact letter of the law, you can not legally sign this paper. I won't use the word fraud because that launched a flame fest previously, but some could consider your signing this letter at the land office as fraud.

This paper is for the benefit of the land officers, not you. They are required to verify that the funds came only from the wife. Before 1999, the only way to do this was to have the wife's parents buy the property, and then gift it to the daughter. This was viewed as discriminatory, and the law was changed so that any Thai could own property, but the land officers were required to verify the source of the funds in a foreign marriage was solely from the Thai half. This paper you sign at the land office is the way they meet that requirement.

There have been several divorce cases where the Thai courts have upheld that the farang husbands were entitled to part or all of the house because they had records showing they paid for it from their personal assets. This paper does not appear to have any standing in a divorce action. I do not know of any actual divorce case where the sin somros argument was used with regard to the house, but it is an obvious extension to the cases where the husbands managed to gain control of the house in divorce settlements. If using funds that are sin suan tua of the farang husband is acceptable to grant them the house in a divorce, then clearly using funds that are sin simros should be acceptable to grant 50% of the house to the farang in a divorce.

This is the likely source of the "farangs using their wives as nominee landholders" statement from some Thai officials that was all the rage last year.

Please bear in mind, I am not aware of any farang that has ever been accused of fraudulently signing this paper at the land office when buying property in their wife's name, but that does not mean the Thai government could not decide to press this argument in the future.

The only thing that is a proven fact is the Government Housing Bank will not loan to any Thai married to a farang because of this argument. I got this straight from the office of Khan Prachuabmoh, the GHB president as I had a personal relationship with his nephew.

There are Thai government officials who interpret the rules this way, even if it is not prevalent or being enforced right now, and even if some Thai Visa poster's find this fact inconvenient. It is best everyone who has a mortgage goes into this with their eyes open. It is not a problem now. That does not mean it won't be a problem in the future.

[RAZZELL]

Could a thai national get a mortgage in Thailand when they are living overseas and based on overseas income?

Interesting question.

Would love to know the answer? (Possibly, if she regularly sent her salary back to a Thai account?)

RAZZ

[gregb]

Could a thai national get a mortgage in Thailand when they are living overseas and based on overseas income?

Interesting question.

Would love to know the answer? (Possibly, if she regularly sent her salary back to a Thai account?)

RAZZ

I would guess not.

In order to qualify for a mortgage most banks assume you are going to be living there. Again, this is rarely enforced, because there is no practical way for the bank to know if you move from your current abode or not. Such a decision wouldn't be made until after the mortgage was already granted.

However, in your case it would be quite obvious. I think it would be hard for anyone to look the other way, although I could be wrong. If a bank was truly interested in inking the loan it is up to them how accommodating they would want to be.

You could probably apply for a commercial loan rather than a mortgage, as those make no assumptions as to the intended purpose of the property. Those are shorter, only about 5 years, but in that case overseas income that was remitted to Thailand could probably be considered.

[dave111223]

Now, as for why the Land Department comes into this, it is because you are technically lying when you sign the paper at the land office that says the funds used to purchase the land came entirely from your wife (sin suan tua of the wife). A loan clearly requires paying back from marital assets (sin somros), not solely from the wife's assets. So, to the exact letter of the law, you can not legally sign this paper. I won't use the word fraud because that launched a flame fest previously, but some could consider your signing this letter at the land office as fraud.

Just because the loan was approved based on the foreign husbands income doesn't mean that the the foreign husbands income is used to repay the loan...the loan could be repaid by anyone (could be repaid using cash previously held by the wife but undisclosed to the bank).

And the point is it's so far fetched that you'd actually have a problem with this that it barely demands consideration. In order the land dept. to actually "bust" you in this manner the following would have to happen.

- Government decides to have any unbelievably draconian crack down on foreign "owned" property.

- Before they even considered "wives as nominee landholders" they would surely have turned all the people owning property through a shell company out into the street.

- They would then need to subpoena all internal bank loan documents for any property owned by a Thai/Foreign couples

- They would then need to analyze all those internal documents to find any if an loans were approved based on the foreigner's income

- They would then need to subpoena all the bank records of the loan account and the foreigner (if even possible as his accounts may be overseas) and analyze that to see if he'd actually been the one paying the loan.

- Then take legal action to repose the property.

Not to mention that if this actually happened (and you'd be paying for the loan for a while) i'm sure that the banks would accept removing the foreigner from the loan in order to avoid repossession (which would likely result in a loan default anyways)

And then all of a sudden...no more "nominee" and the government has wasted a sh*t load of time.

[trogers]

Just because the loan was approved based on the foreign husbands income doesn't mean that the the foreign husbands income is used to repay the loan...the loan could be repaid by anyone (could be repaid using cash previously held by the wife but undisclosed to the bank).

Reminds me of the instance just after the Asian Financial Crisis, a Malaysian guy came knocking at the office door offering to buy 2nd hand tower cranes with a briefcase full of cash...

Wondering which is a bigger crime - fraud or money laundering...

Edited August 5, 2010 by trogers

[gregb]

Now, as for why the Land Department comes into this, it is because you are technically lying when you sign the paper at the land office that says the funds used to purchase the land came entirely from your wife (sin suan tua of the wife). A loan clearly requires paying back from marital assets (sin somros), not solely from the wife's assets. So, to the exact letter of the law, you can not legally sign this paper. I won't use the word fraud because that launched a flame fest previously, but some could consider your signing this letter at the land office as fraud.

Just because the loan was approved based on the foreign husbands income doesn't mean that the the foreign husbands income is used to repay the loan...the loan could be repaid by anyone (could be repaid using cash previously held by the wife but undisclosed to the bank).

And the point is it's so far fetched that you'd actually have a problem with this that it barely demands consideration. In order the land dept. to actually "bust" you in this manner the following would have to happen.

- Government decides to have any unbelievably draconian crack down on foreign "owned" property.

- Before they even considered "wives as nominee landholders" they would surely have turned all the people owning property through a shell company out into the street.

- They would then need to subpoena all internal bank loan documents for any property owned by a Thai/Foreign couples

- They would then need to analyze all those internal documents to find any if an loans were approved based on the foreigner's income

- They would then need to subpoena all the bank records of the loan account and the foreigner (if even possible as his accounts may be overseas) and analyze that to see if he'd actually been the one paying the loan.

- Then take legal action to repose the property.

Not to mention that if this actually happened (and you'd be paying for the loan for a while) i'm sure that the banks would accept removing the foreigner from the loan in order to avoid repossession (which would likely result in a loan default anyways)

And then all of a sudden...no more "nominee" and the government has wasted a sh*t load of time.

You missed the point.

If you have a loan, that repayment is coming out of funds that were earned during the marriage. Banks don't give mortgages if there is no income stream. Those funds justifying the repayment are sin somros. Doesn't matter who is actually earning the money or who is actually paying. All income by either party is deemed a joint marital asset and owned 50% by the other. Even if the husband is not working and has no money, and the wife is the sole bread winner, he is technically the owner of 50% of everything his wife earns during the marriage.

The only possible way around this is if the Thai woman had a bank account that dated back to before the marriage, was kept completely separate from the husband, she could prove she used that account and only that account to make the loan payments, and she never topped up that account after the marriage. Any interest earned on that account by the way is sin somros. Only the original funds are sin suan tua, so she would need substantially more than the value of the mortgage in that account before the marriage to make your argument hold.

The foreigner and his finances have nothing to do with it. The burden of proof is completely on the Thai side, and I would venture to say there is nobody anywhere in the country who would be able to show that the entire mortgage was repaid with sin suan tua funds of the wife. The idea is so unlikely that it can be discarded from consideration.

Anyone who is married to a foreigner can not take a loan for property if you follow the letter of the law and interpret it the way some Thai officials do. The government would not need to talk to any banks. If there is a mortgage registered on the property, and you are married to a foreigner, then you are paying backing with sin somros funds and therefore you are in violation.

I am not saying this has happened yet, and I am not saying it necessarily will happen. But the law is written in such a way that it could happen at any time if someone decided they wanted to make an issue of it. Just be aware of the fact. There is no truly safe way for a Thai woman and a foreign husband to take out a mortgage on land.

Edited August 5, 2010 by gregb

[dave111223]

If you have a loan, that repayment is coming out of funds that were earned during the marriage. Banks don't give mortgages if there is no income stream. Those funds justifying the repayment are sin somros. Doesn't matter who is actually earning the money or who is actually paying. All income by either party is deemed a joint marital asset and owned 50% by the other. Even if the husband is not working and has no money, and the wife is the sole bread winner, he is technically the owner of 50% of everything his wife earns during the marriage.

The only possible way around this is if the Thai woman had a bank account that dated back to before the marriage, was kept completely separate from the husband, she could prove she used that account and only that account to make the loan payments, and she never topped up that account after the marriage. Any interest earned on that account by the way is sin somros. Only the original funds are sin suan tua, so she would need substantially more than the value of the mortgage in that account before the marriage to make your argument hold.

Keep in mind that Thailand is a mostly cash in hand country with limited paper trails etc...

For example my wife has a mortgage for a property each month we deposit cash to any account for mortgage repayment.

She runs her own business selling overseas so does not have pay stubs or a fixed salary. And i don't work in Thailand.

Who's to say where that money came from? It could very well have come from a bunch of "sin suan tua" cash she had stuffed in a mattress? And how would the government prove otherwise?

I see your point that technically no foreigner could purchase property with a mortgage, but the fact that it would be in many cases impossible for the government to enforce this technicality makes it moot.

[trogers]

Keep in mind that Thailand is a mostly cash in hand country with limited paper trails etc...

For example my wife has a mortgage for a property each month we deposit cash to any account for mortgage repayment.

She runs her own business selling overseas so does not have pay stubs or a fixed salary. And i don't work in Thailand.

Who's to say where that money came from? It could very well have come from a bunch of "sin suan tua" cash she had stuffed in a mattress? And how would the government prove otherwise?

I see your point that technically no foreigner could purchase property with a mortgage, but the fact that it would be in many cases impossible for the government to enforce this technicality makes it moot.

I wonder where the burden of proof lies, the defendant or the prosecutor...

And even if the defendant can proof a legitimate stream of undeclared personal income, the charge of evading taxes still stands...

[dave111223]

the charge of evading taxes still stands...

Not if the amount of money did not require taxes be paid.

For example she say said "My father gave me (as a gift) 150K cash per year from the age of 1-18 year and i stuffed it in a mattress which i'm now using to repay the loan" I believe the income tax liability in Thailand starts at 200k per year?

(Or better yet my great granddad who's already dead instead of father)

Edited August 6, 2010 by dave111223

[Pakeha]

How about if it's being repaid with funds from NZ? The NZ funds are 50% my wife's and it is from her 50% that the mortgage is being repaid from. My thai salary is of interest because I am a guarantor. That is not to say my salary is the source of the funds that will pay the mortgage. Is this a fair argument?

It seems like there are too many what ifs for this law to be applied.

[trogers]

How about if it's being repaid with funds from NZ? The NZ funds are 50% my wife's and it is from her 50% that the mortgage is being repaid from. My thai salary is of interest because I am a guarantor. That is not to say my salary is the source of the funds that will pay the mortgage. Is this a fair argument?

It seems like there are too many what ifs for this law to be applied.

Remit her NZ funds into her Thai bank account on a regular basis, and also declare them annually for taxation. These documentations and tax receipts alone may get her bank loan approved if the quantum is 1.6 times the monthly repayment amount. You may not need to declare your income nor act as a guarantor, avoiding unnecessary questions.

[CWMcMurray]

Based upon the above logic....

If all monies earned are considered joint marital assets and belong 50% to each party... then so long as the joint income is more than double the mortgage payment couldn't it be argued that the wife's 50% was used to pay the mortgage and the husbands 50% was used for "other things".

How could it be possible to prove otherwise?

And more importantly, would the government even waste the time and money trying to ...

[trogers]

And more importantly, would the government even waste the time and money trying to ...

The govt need not try...

All the Land office need to do is to refuse the transfer, whether buy or sell, and ask you to show them...

If you are not happy with their refusal, you can bring them to court and then show the judges...

Like I have asked, where does the onus of proof lie?

[dave111223]

The govt need not try...

All the Land office need to do is to refuse the transfer, whether buy or sell, and ask you to show them...

If you are not happy with their refusal, you can bring them to court and then show the judges...

Like I have asked, where does the onus of proof lie?

But then again we are in Thailand, where a couple of 1000baht bung turns a refusal into acceptance.

And last time i was at the land office turned a 4 hours queue into a 20 minute breeze through...

Edited August 11, 2010 by dave111223

[sleepyjohn]

Sounds like you have a deal anyway but if it's any use I hear one can get a mortgage for Thai property in Singapore and the mortgagee can be any nationality.

[Pakeha]

Here's an alternative approach. If my wife buys a property outright, thereby owning it freehold, can she then take out a mortgage against that property? Keeping in mind we are not working or resident in Thailand currently.